Portugal

Member Organizations

Member Organization Associate

  Ordem dos Contabilistas Certificados
  Ordem dos Revisores Oficiais de Contas

Legal and Regulatory Environment

  • Overview of Statutory Framework for Accounting and Auditing

    As a member of the European Union (EU), Portugal is subject to the accounting, auditing and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations.

    The Decree Law No. 262/1986, Código das Sociedades Comercias (Companies Code), sets basic reporting functions for all business entities and requires companies to maintain accounting books and prepare annual financial statements.

    The Decree Law No. 134/2012 grants authority to the Comissão de Normalização Contabilística (CNC), under the purview of the Ministry of Finance, to set accounting standards for corporate and public sector entities. The Sistema de Normalização Contabilistica (SNC), as amended by Decree-Law No. 98/2015, establishes different financial reporting requirements depending on the size and nature of the entity.

    The SNC standards are based on IFRS; however, the standards do differ from the IFRS. IFRS for Small-and Medium-Sized Entities (SMEs) has not been adopted and there are no plans to do so. The local standards for micro-entities, small and medium-size entities, and not-for-profit entities are based on NCRF In addition, all corporate sector companies are permitted to apply IFRS for their consolidated financial statements, under certain circumstances.

    The financial sector regulators, Banco de Portugal (for banks and financial institutions), Autoridade de Supervisão de Seguros e Fundos de Pensões (ASF) (overseeing insurance companies and pension funds), and Comissão do Mercado de Valores Mobiliários (CMVM) (for listed companies) are empowered to set accounting and financial reporting requirements for companies under their supervision. The regulators have adopted EU-endorsed IFRS for consolidated financial statements.

    The auditing requirements are set in the Law No. 140/2015, updated by Law No. 99-A/2021, which was issued to transpose the EU Audit Directive and Regulation (EU) No 537/2014. The Law directly adopts ISA as issued by the IAASB, and requires statutory audits to be performed according to ISA.

    The Companies Code mandates that all public limited liability companies (S.A.) must have an annual audit conducted. It also requires private limited companies (Lda) to have their financial statements audited annually if they exceed two of three thresholds in two consecutive reporting periods: (i) net turnover of € 3,000,000; (ii) total assets of € 1,500,000; and/or (iii) average employees of 50 for the year. Private limited companies that do not exceed two of the previous thresholds may qualify for an exemption from the annual audit requirement. In addition, all public interest entities, defined as listed companies, credit institutions, insurance and reinsurance companies, pension funds, investment companies, in-credit institutions, and some insurance holdings companies, are required to be audited in accordance with the Law.

  • Regulation of Accountancy Profession

    In Portugal, the Law No. 140/2015 updated by Law No. 99-A/2021, and the Law No. 139/2015 recognize two segments of the accountancy profession: statutory auditors (Revisores Oficiais de Contas (ROCs)) and chartered accountants (Contabilista Certificado). The Law No. 148/2015 recognizes the Comissão do Mercado de Valores Mobiliários (CMVM) as the organization responsible for overseeing the audit profession (ROC) in addition to regulation at the professional level by the Ordem dos Revisores Oficials de Contas (OROC) and the Ordem dos Contabilistas Certificados (OCC), respectively.

    Universities, the OROC, and the OCC—under the oversight of the Ministry of Finance (MoF)—have a role in implementing initial professional development (IPD) and continuous professional development (CPD) requirements for professional accountants, which are established in the Law No. 148/2015, Law No. 140/2015, and the Law No. 139/2015.

    To be eligible to practice as a statutory auditor and become a member of OROC, individuals must: have a university degree, complete entrance examinations (4 written exams and 1 oral exam), have work experience of at least three years (under the supervision of a mentor with a minimum five years’ experience as statutory auditor) and pass a final assessment. Then OROC members can be registered with the CMVM to be able to sign audit reports. To become a chartered accountant and become an OCC member, individuals must: have a business area (e.g., accounting, management, economics) university degree (minimum three years duration or 180 ECTS – European academic credits standard); complete course credits (undergraduate or postgraduate level) from specific competency areas to meet the accounting education program set by OCC; 800 hours of monitored practical experience; and pass a final professional examination. Both OROC and OCC members are subject to CPD requirements.

    The CMVM, as the oversight authority for the audit profession, has the following responsibilities: (i) maintaining a registry of statutory auditors and audit firms (Sociedades de Revisores Oficiais de Contas (SROC) after being registered at OROC); (ii) establishing a quality assurance system (QA) for audits of public interest entities (PIEs); (iii) developing an investigative and disciplinary (I&D) system; and (iv) issuing regulations on matters falling within the scope of its responsibilities while consulting the OROC.

    Some responsibilities of the OROC overlap with the responsibilities of the CMVM. OROC carries out the following regulatory activities: (i) implementing IPD and CPD requirements for statutory auditors; (ii) maintaining a registry of statutory auditors and audit firms; (iii) setting ethical requirements for its members; (iv) administering and monitoring of the CPD program; (v) establishing a QA system for audits of non-public interest entities (non-PIEs); and (vi) establishing an I&D system for its members.

    Chartered accountants are regulated by the OCC, under the purview of the MoF. In accordance with the Law, the OCC’s responsibilities include the following: (i) maintaining the registry of chartered accountants and accounting firms; (ii) implementing IPD and CPD requirements for chartered accountants; (iii) enforcing ethical standards; (iv) establishing an I&D system for its members; (v) administering and monitoring of the CPD program; and (vi) establishing a quality assurance system (QA) for its members.

  • Audit Oversight Arrangements

    The Law No. 148/2015 recognizes the Comissão do Mercado de Valores Mobiliários (CMVM) as the independent audit oversight body. The CMVM is a member of IFIAR.

    The CMVM has the following responsibilities: (i) maintaining a registry of statutory auditors and audit firms ((Revisores Oficiais de Contas (ROC) and Sociedades de Revisores Oficiais de Contas (SROC)); (ii) establishing a quality assurance system (QA) for audits of public interest entities (PIEs); (iii) developing an investigative and disciplinary (I&D) system; and (iv) issuing regulations on matters falling within the scope of its responsibilities in consultation with the Ordem dos Revisores Oficiais de Contas (OROC) – the mandatory professional accountancy organization for statutory auditors.

  • Professional Accountancy Organizations

    The Ordem dos Contabilistas Certificados (OCC)

    The OCC, established in 1995, is the mandatory professional accountancy organization for chartered accountants (Contabilista Certificado (CC)) and accounting firms (Sociedades Profissionais de Contabilistas Certificados e Sociedades de Contabilidade) in accordance with Decree Law 459/99, amended by Law No. 139/2015 and Law No. 119/2019. OCC members prepare tax and financial statements and are the only members of the profession allowed to sign financial statements along with company representatives. In accordance with the Law, the OCC’s responsibilities include the following: (i) maintaining the registry of chartered accountants and accounting firms; (ii) implementing IPD and CPD requirements for chartered accountants; (iii) enforcing ethical standards; (iv) establishing an I&D system for its members; (v) administering and monitoring of the CPD program; and (vi) establishing a quality assurance system (QA) for its members.

    In addition to being a member of IFAC, the OCC is a member of the Committee for Integration Europe—Latin America (CILEA), a member of the European Federation of Accountants and Auditors for SMEs (EFAA), member of the Fédération des Experts-Comptables Mediterranéens (FCM) and the União dos Contabilistas e Auditores de Língua Portuguesa (UCALP).

    The Ordem dos Revisores Oficials de Contas (OROC)

    The OROC, established in 1974 by Ministerial Order 83/74 of February 6, rulled by the Law No. 140/2015 updated by Law No. 99-A/2021, is the mandatory professional accountancy organization for statutory auditors, (Revisores Oficiais de Contas (ROCs)) and statutory audit firms (Sociedades de Revisores Oficiais de Contas (SROCs)). OROC members are the only professional accountants authorized to provide audit or audit-related services. In accordance with the Law, OROC carries out the following regulatory activities: (i) implementing IPD and CPD requirements for statutory auditors; (ii) maintaining a registry of statutory auditors and audit firms; (iii) setting ethical requirements for its members; (iv) administering and monitoring of the CPD program; (v) establishing a QA system for audits of non-public interest entities (non-PIEs); and (vi) establishing an I&D system for its members.

    In addition to being a member of IFAC, the OROC is a member of Accountancy Europe and the União dos Contabilistas e Auditores de Língua Portuguesa (UCALP).

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    In Portugal, a mandatory quality assurance (QA) review system is required for all statutory audits of financial statements. Under the Law No. 148/2015 the Comissão do Mercado de Valores Mobiliários (CMVM) is responsible for conducting the reviews.

    Accordingly, the CMVM has established a QA review system for audits of all public interest entities (PIEs), which include listed companies, credit institutions, insurance and reinsurance companies, pension funds, investment companies, in-credit institutions, and some insurance holdings companies. Based on available information on the CMVM’s QA review system, and as indicated by OROC, it is aligned with SMO 1 best practices.

    As far as non-PIEs QA reviews are concerned, the Ordem dos Revisores Oficiais de Contas (OROC) is performing these inspections in accordance with the Decree Law No. 140/2015. The OROC’s QA review system is subject to supervision by the CMVM. The OROC reports that its QA system fulfills all the requirements of SMO 1.

    Lastly, in accordance with the Decree Law No. 139/2015, the Ordem dos Contabilistas Certificados (OCC) has the responsibility of establishing a mandatory QA review system for chartered accountants (Contabilista Certificado). The OCC has instituted a mandatory quality control program for accountants, which involves practice review inspections and quality control regulations. The OCC reports that it has used SMO 1 as a guideline for developing its QA system.

    Current Status: Adopted

  • International Education Standards

    In Portugal, the universities, the Ordem dos Revisores Oficiais de Contas (OROC) and the Ordem dos Contabilistas Certificados (OCC) —under the oversight of the Ministry of Finance (MoF)—have a role in further setting and implementing initial professional development (IPD) and continuous professional development (CPD) requirements for professional accountants, which are established in the Law No. 148/2015, Law No. 140/2015 and the Law No. 139/2015.

    To be eligible to practice as a statutory auditor and become a member of OROC, individuals must: have a university degree, complete entrance examinations (4 written exams and 1 oral exam), have work experience of at least three years (under the supervision of a mentor with minimum five years’ experience) and pass a final assessment. The OROC reports that the requirements for statutory auditors comply with the revised 2019 IES.

    To become a chartered accountant and become an OCC member, individuals must: have a business area (e.g., accounting, management, economics) university degree (minimum three years duration or 180 ECTS – European academic credits standard); complete course credits (undergraduate or postgraduate level) from specific competency areas to meet the accounting education program set by OCC; 800 hours of monitored practical experience; and pass a final professional examination. As reported by OCC, further review is necessary to assess the extent of alignment of their educational requirements with the 2019 IES.

    Both OROC and OCC members are subject to CPD requirements, which meet IES 7 and 8, respectively.

    Current Status: Partially Adopted

  • International Standards on Auditing

    The auditing requirements are set in Law No. 148/2015, which was issued to transpose the Audit Directive and Regulation (EU) No 537/2014. The Law directly adopts ISA as issued by the IAASB.

    The Ordem dos Revisores Oficiais de Contas (OROC) translates the IAASB Handbooks and has translated the 2018 IAASB Handbook and is translating the 2020 Handbook.

    Current Status: Adopted

  • Code of Ethics for Professional Accountants

    All professional accountants in Portugal are subject to ethical requirements. The Ordem dos Revisores Oficiais de Contas (OROC) sets ethical standards for the auditing profession in accordance with its prescribed mandate in Law No. 140/2015. The OROC approved a revised Code of Ethics effective January 2012, which is aligned with the 2009 version of the IESBA Code of Ethics. OROC has reported plans to translate the 2018 and 2021 versions of the International Code of Ethics to incorporate the requirements of the latest Code of Ethics issued by the IESBA.

    In addition, articles 73–74 of Law 140/2015 define the key concepts around independence which align with the latest version of the International Code of Ethics. The CMVM, which has ultimate oversight of the auditing profession, issued an FAQ stating that IESBA Code of Ethics is being considered as a source for further interpreting and developing independence principles.

    Law No. 139/2015 determines ethical standards for chartered accountants. The Ministry of Finance is responsible for setting the Code of Ethics for approval by the Portuguese Parliament. The Ordem dos Contabilistas Certificados (OCC) members must adhere to the Code during their activities. The OCC states that while there is no specific reference in the Law to the IESBA Code of Ethics, the requirements of its Código Deontologico dos Contabilistas Certificados are in line with and no less stringent than those in the 2020 International Code of Ethics for Professional Accountants.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The Comissão de Normalização Contabilística (CNC), under the purview of the Ministry of Finance, is responsible for setting public sector accounting standards in accordance with Decree Law No. 134/2012.

    A public sector accounting framework based on IPSAS, the Sistema de Normalização Contabilística para as Administrações Públicas, was approved by the Decree Law No. 192/2015. In addition, the CNC has developed an implementation manual, version 1 and version 2.

    The Ordem dos Revisores Oficiais de Contas (OROC) reports that the framework includes specific standards that are not based on IPSAS (e.g., a standard for budgeting accounting and a standard for management accounting) but that overall the framework is based on the 2014 version of IPSAS. CNC is preparing a revised version as of 2021.

    Current Status: Partially Adopted

  • Investigation and Discipline

    All professional accountants are subject to investigation and discipline procedures. The investigative and disciplinary (I&D) processes for statutory auditors are defined in Law No. 148/2015, which was issued to transpose the EU Audit Directive and Regulation (EU) No 537/2014, and the Decree Law No. 140/2015. Under the laws both the Comissão do Mercado de Valores Mobiliários (CMVM) and the Ordem dos Revisores Oficiais de Contas (OROC) have responsibility for implementing I&D mechanisms for auditors. The OROC reports an overlap in responsibilities between the two entities but confirms that both systems are aligned with the best practices of SMO 6.

    With respect to chartered accountants, the Ordem dos Contabilistas Certificados (OCC) has implemented an I&D system in accordance with the requirements of Law No. 139/2015. The OCC indicates that its I&D mechanism incorporates all the requirements of SMO 6.

    Current Status: Adopted

  • International Financial Reporting Standards

    In Portugal, the financial sector regulators, Banco de Portugal, Autoridade de Supervisão de Seguros e de Fundos de Pensões (ASF), and the Comissão do Mercado de Valores Mobiliários (CMVM) are empowered to set accounting and financial reporting requirements for companies under their supervision. The regulators have adopted EU-endorsed IFRS for the preparation of consolidated financial statements of all public interest entities, including consolidated financial statements of listed companies, banks, financial institutions, insurance companies, and pension funds.

    EU-endorsed IFRS have slight modifications from IFRS (e.g., temporary 'carve-out' from IAS 39 Financial Instrument: Recognition and Measurement and a temporary extension of the scope of applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts) but according to the IFRS Foundation, the majority of companies can state full compliance with the IFRS.

    In addition, the Decree Law No. 134/2012 grants authority to the Comissão de Normalização Contabilística (CNC), under the purview of the Ministry of Finance, to set accounting standards for corporate sector entities. The Sistema de Normalização Contabilistica (SNC) establishes different financial reporting requirements depending on the size and nature of the entity such as,

    The SNC standards are based on IFRS, however, they do differ.

    Lastly, all private sector companies are permitted to apply IFRS for their annual and consolidated financial statements, under certain circumnstances. IFRS for Small-and Medium-Sized Entities (SMEs) has not been adopted, and there are no stated plans to do so.

    Current Status: Adopted

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Methodology

Methodology
Last updated: 08/2022
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